Pinoys join ‘paluwagan’ to ease financial crisis

By HECTOR PASCUA, ABS-CBN Europe News Bureau

Posted at Apr 02 2009 06:44 PM | Updated as of Apr 03 2009 03:15 AM

Pinoy Group in Austria (Hector Pascua)

The current global financial crisis has seen the economies of many developing countries crash. In Austria alone, the inflation rate has risen.

Austrian Economic Chamber of Commerce expert Margit Schratzenstaller mentioned in the state-owned radio station here that the economy will go down to 0.5% lower than that of the present inflation rate.

For Filipinos in the country, this means, they have to tighten their belts more. Prices of basic commodities, diesel and gas, transportation fees and others will surely increase.

A number of Filipinos in the country have already thought of ways to cope up with the rising financial problem.

Vicky Nunez, a member of the Novo Ecijanos in Austria told ABS-CBN Mews that his group has resorted to “paluwagan” – a system where members pool money and then each one takes turn in bringing home the accumulated amount every week or month. Through “paluwagan” members could really save and are also aware of valuing their hard-earned income.

“We are consistent and on time in giving our contribution only until we receive our sahod (take-home money). Through this scheme, we want to pool our savings, since these are hard-earned money”, Nunez said.

Another Pinoy saving’s group in Vienna has decided to organize a “paluwagan” in order to save a little so that they would have something to grab when the crisis comes to worst.

Myrna Andaya, member of the “paluwagan” group said, “A big part of my salary go to remittances, another part is allotted for consumption. There is still excess money for savings and other investments”.

Andaya joined the “paluwagan” because of the simple philosophy behind it.

“Paluwagan is a part of a Philippine tradition which builds on mutual trust and group solidarity to meet the needs of individuals in the community. Thus, the aim of this scheme is not only to save, but we want to help empower each other to initiate developmental strategies through collective action,” added Andaya.

Nunez, Andaya and other Pinoys here in Austria joined paluwagan since they believe that it is helpful, as they get easy access to credit and or a bigger amount of money. Nevertheless, there are also some Pinoys in the community here who are not satisfied with this saving scheme.

“If one needs money, instead of joining a paluwagan, it may be wiser to apply for a loan at a bank or a credit institution. Such action may protect you as a borrower. Opening a bank account could also be an alternative to saving regularly. This has a big advantage, while your money is in the bank, it will earn interest,” commented a Philippine Bank manager operating in Vienna who do not want to be identified.

Generally, such initiative in times of financial crisis, promote fraternity among Filipinos.